Monday, April 3, 2006

PMC-Sierra agreed to acquire Passave Inc., a developer of system-on-chip semiconductor solutions for the Fiber To The Home (FTTH) access market, for approximately $300 million in PMC-Sierra common stock. The deal is expected to close within April 2006 and is conditioned upon the receipt of normal governmental rulings.

The Passave product line includes system-on-chip solutions for Optical Line Terminals (OLTs) for the Central Office, Optical Network Terminals (ONTs), and Optical Network Units (ONUs) solutions for residential termination equipment. Passave has delivered two million ONU devices that have been deployed in NTT's Fiber To The Home broadband access network.

"Our acquisition of Passave brings PMC-Sierra an experienced and highly innovative team with clear market share leadership in Passive Optical Networking solutions. This acquisition fits with our strategic intent to address the high-growth Fiber Access market and is aligned with PMC's developments in Customer Premises Equipment," said Bob Bailey, Chairman and CEO. "PON is the ultimate Triple Play access technology and is key to the build-out of the second generation FTTH-based broadband infrastructure."

Passave employs approximately 150 employees worldwide and has facilities in Herzliya, Israel; Santa Clara, California; and Tokyo, Japan; and regional sales offices in Korea and China.

http://www.passave.comhttp://www.pmc-sierra.comIn March 2006, Passave announced delivery its one millionth FTTH ONU device to Mitsubishi Electric Corporation for use in Japan's gigabit/second FTTH broadband access network market. Mitsubishi has been supplying customer premise equipment (CPE) using Passave semiconductor devices to carriers in Japan since 2004. The FTTH broadband access network in Japan is the world's largest, with new FTTH subscribers exceeding new DSL subscribers since the first quarter of 2005.